"I've been conducting a 70-year taste test -- since I was seven-years old," Buffett said, when asked why he was investing in Wrigley. "I've done the same thing with Mars products and they've had the same test results."

In other deal news, Kirk Kerkorian's Tracinda said Monday it intends to make a cash tender offer for a stake in Ford. The offer is for 20 million shares at $8.50 a share, representing a more than a 13-percent premium over Ford's closing price of $7.50 on Friday. Ford shares rose.

Ford rival General Motors was the top gainer on the Dow.

"M&A in this type of an environment, with credit being so tight, I think might send a signal that things are beginning to loosen up in terms of the credit crunch," Peter Cardillo, chief market economist at Avalon Partners, told Reuters.

Continental Airlinescalled off talks with rivalUnited Airlines due to its weakened balance sheet, adding that the soaring price of oil makes doing a merger more risky, a source told Reuters. The cost of jet fuel in New York has rocketed to $3.50 a gallon, compared with $2 a year ago.

The source also said Continental is in "advanced talks" with British Airwaysand American Airlines, owned by AMR , about a potential alliance.

This latest wave of airline-merger talk comes just a few weeks after Delta agreed to buy Northwest , creating the world's largest airline.

Microsoft was the biggest decliner on the Dow as investors wait to see if the software giant decides to go directly to shareholders in its attempt to buy Yahoo after the deadline for Yahoo to make a decision expired on Saturday without word from Yahoo.

Financials slipped after Morgan Stanley analysts told investors to "sell the rally" in financials. The analysts warned the credit crunch is just beginning and slashed its full-year forecast for several big banks.

Morgan Stanley's top "long" picks, which have less credit sensitivity, include Bank of New York , JPMorganand PNC Financial .

The analysts advised being "underweight" in those banks with greater exposure to mortgages, including Wells Fargo and Wachovia , and those that operate in harder hit sections of the U.S. including Fifth Third Bancorpand KeyCorp . The bank is also underweight on Citigroup .

Visa shares advanced ahead of the credit-card company's earnings, due out after the closing bell Monday. This is the company's first earnings report as a public company. Analysts expect a profit of 55 cents per share.

Wednesday’s interest-rate decision and Friday’s nonfarm payroll data are likely to dominate the market sentiment as the week progresses, Omer Bhatti, head sales trader from Worldspreads, told “Worldwide Exchange,” with many market participants hoping that markets no longer need dramatic slashes in the Fed’s base rate.

“We’ve had such a run of cuts maybe a pause at this stage will probably suggest to the general market that there is stability there,” Bhatti said.

The market is pricing in a 78 percent chance of another quarter percentage-point cut, according to fed-funds futures. It's the first time in months that expectations for a reduction haven't been unanimous.

The record-setting price of oil is set to benefit the likes of ExxonMobil , Royal Dutch Shell and BP ,as they report earnings this week.

In morning trading, crude oil creeped back up toward $119 a barrel on the New York Mercantile Exchange.